Wilmington starts recovery

21st Sep 2010 12:29

Publishing and training company Wilmington managed to report flat profits even though revenues fell in the year to June 2010 and it says there are signs that key markets are recovering. Revenues slid from £86.3m to £78.4m but underlying pre-tax profit was only slightly lower at £13.1m. Nearly all of the decline in revenues was in the first half of the year and profit recovered strongly in the second half. Wilmington says that there are signs of improvement in the legal and investment banking markets. Accountancy, charities, healthcare, pensions and compliance continue to hold up well. The total dividend was maintained at 7p a share.Wilmington is expanding its insurance publishing business through the purchase of Axco Insurance Information Services for an initial £21.3m. There is a further payment of up to £675,000 depending on the current assets of Axco at the end of September 2010. Axco is thought to have cash of £2m in its balance sheet. Axco reported an operating profit of £1.23m on revenues of £5.6m in 2009. Nearly all of the business comes from products delivered electronically and the renewal rate is more than 95%. Around one-half of revenues are in dollars. Wilmington had net debt of £16.8m at the end of June 2010 and it has enough in the way of debt facilities to pay for the latest acquisition.The acquisition has led to small upgrades in forecast earnings per share to 10.8p for 2010-11. The shares are trading at around 15 times prospective 2010-11 earnings.